WikiLeaks Rumor on Heels of Dec 21 Securitization Standards Letter Sent to BigWig U.S. Regulators
There's a letter bouncing through the web -- the full text is saved online at Scribd (read it here) dated today, sent to Tim Geithner (Secretary of the Treasury), Ben Bernanke (Chairman of the Federal Reserve), Sheila Bair (Chairman of the FDIC), Mary Schapiro (Chairman of the SEC), John Walsh (Comptroller of the Currency), and Ed DeMarco (Director of the Federal Housing Finance Agency). The biggest of the big, American finance-wise. These are the Regulators, folks.
Entitled, "Open Letter to U.S. Regulators Regarding National Loan Servicing Standards," it asks that major changes be implemented in the mortgage securitization markets. It urges that cohesive change needs to happen as soon as possible because not only homeowners and investors but the national economy as a whole is being determinally impacted by the current state of affairs.
"...[N]ew securitization standards should be adopted now. The rules under the Dodd-Frank Act relating to disclosure and risk retention for securitizations, which apply to all market participants, are the place to start. We suggest, therefore, that the agencies concerned, led by FDIC and SEC, undertake a coordinated rule making effort to start the process and then also report to Congress."
Details are given on how and what should be done, and the letter is signed by 50 pretty prominent folk, such as Martin Mayer of the Brookings Institution; Allan Mendelowitz, former chairman of the Federal Housing Finance Board; James K. Galbraith of the University of Texas; and Zvi Bodie of Boston University.
Convergence in Coverage: WikiLeaks Threat and Securitizations Standards Letter
Meanwhile, even bigger coverage in today's online news is the rumor that WikiLeaks is targeting Bank of America in its next Leak, speculation that has been driven in part by Julian Assange's comments to Forbes magazine last week, where he warned that WikiLeaks would be targeting a major bank or two in the near future. (Read the Forbes interview here.)
Andrew Ross Sorkin at the New York Times is taking the Forbes interview a bit differently. After pointing to an Assange interview given to the Times of London, where Assange claims enough leakable material to force the resignation of at least one major bank executive, Sorkin looks not to the impact of WikiLeaks upon the banks but instead upon the regulators.
According to Sorkin, the same regulators who received the Securitizations Standards Letter this morning may be the ones really hurt by this new, rumored WikiLeak. Why? If the leaked documents are as juicy as some expect, the public outcry may point more to the Powers that Be (like the SEC) who have spent years of time and millions of dollars in investigations that have come to nothing.
- Will there be Bad Stuff in the leaked documents?
- If there is Bad Stuff, then why didn't the SEC and its fellow regulatory agencies find it?
- If there is Bad Stuff and the regulatory agencies found it, then why didn't they do something about it?
Yes, it's a sure bet that there are some sleepless nights now and in the future for the Regulators. And one has to wonder if the Securitization Standards Letter's public debut now is in proactive response to an expected WikiLeak within the next few days. Has there already been a "mini-leak" of sorts?